Huge Airbnb home struggling

[Joshua Larson]

Hi everyone,

I purchased a large 4 bedroom Home in Panama City. It was used as a short term rental and I wanted to continue that trend. For the last 6 months its been rented once. I hired the property management that it was under when I purchased it. I made a few updates but nothing is really happening. Is there anything else I need to do? At this point i'm not sure what to do. Sell or rent long term etc.  Thanks 

[Janel Kolbo]

Quote from @Joshua Larson:

Hi everyone,

I purchased a large 4 bedroom Home in Panama City. It was used as a short term rental and I wanted to continue that trend. For the last 6 months its been rented once. I hired the property management that it was under when I purchased it. I made a few updates but nothing is really happening. Is there anything else I need to do? At this point i'm not sure what to do. Sell or rent long term etc.  Thanks 

 Have you had a conversation with the PM? Have you looked at your listing as a guest to see what they see and also compare your pricing with your neighbors? Would the LTR cover the mortgage and hopefully cashflow? I am not as concerned with significant cash flow in my FL rentals since appreciation is higher. I agree, something has to give. Winter is slow season so a great time to take action!

[Michael Dumler]

@Joshua Larson, rental rate and location are the two biggest factors prospective tenants will view/assess first. If it's a rent issue, then you need to readjust your numbers accordingly to increase tenant demand. What are lease comps indicating? Are similar properties nearby renting for lower? Your property management needs to be held accountable asap. If you bought in an undesirable area/neighborhood then this is a bigger problem. The old saying is you have a deal when you buy. A couple of other items to note; make sure the PM is using professional photos for the listing, update furniture if needed, positive reviews from past guests are helpful, offer discounts in the off months, etc. Needless to say, one stay in the last six months is not a good trend. Get on the phone with your PM now! Hope this helps! 

[Scott E.]

It probably comes down to one of 3 things..

1. Your listing sucks (photos & description)

2. You're priced too high

3. You have bad reviews

If you share the link to your listing it will be easier for us to offer feedback.

[Lyndsay Zwirlein]

Quote from @Joshua Larson:

Hi everyone,

I purchased a large 4 bedroom Home in Panama City. It was used as a short term rental and I wanted to continue that trend. For the last 6 months its been rented once. I hired the property management that it was under when I purchased it. I made a few updates but nothing is really happening. Is there anything else I need to do? At this point i'm not sure what to do. Sell or rent long term etc.  Thanks 

There is a program called Rankbreeze that shows you where you rank compared to your peers and offers suggestions on where to improve. Also where is the PM company listing it? 

[Brent K.]

Joshua, 

As other have said I believe a posting of the listing would be helpful in drafting feedback.

With that said if it is the property, I believe it is based on my limited research……

What is the profile of your target prospective tenant? I ask because the property's location looks to be in a residential community approx.. 10 miles from the beach and not within walkability for shopping/entertainment in Panama City. I am unfamiliar with the Panama City market but my first guess would be Airbnb/STR users would pay a premium to be closer to the beach.

Did the seller provide documentation regarding STR Gross Income (100K)? And if so how does it compare? If you closed in June 2022 what were 2021 numbers for July- November and at what occupancy?

What is the PM’s response on why you are not at the same #’s?

As other's have said photos are important and I think the PM company is doing you a disservice in listing photos and description. They appear to be using some identical photos to the MLS listing from months ago even though your furniture has changed. I would expect more from my PM.

One recommendation I would make would be to try and have some consistency within the bedroom design or theme the property. From the listing photos all the bedrooms have different color bed skirting (red, beige, blue, brown, etc.), different color/patterned rugs, and different color/type of furniture, etc. For a STR beach location people often prefer a beach theme house vs standard furniture/coloring etc.

Additionally, I would remove the desk lamps for the bathroom photos.

Overall, I think it would help the listing you tried to present a more consistent theme to the home.

Again, I think you would get a better response from other and helpful ideas if you posted the Airbnb listing to get their feedback.

[Joshua Larson]

https://www.airbnb.com/rooms/6...

[Alex Larcheveque]

@Joshua Larson, sorry to hear that your Airbnb is struggling. 

A few things off the top that I've noticed: 

1) Reviews. You only have one review. Lower your price for a brief time, get people staying at your Airbnb, and get your reviews up. You wouldn't want to stay at a place that hasn't been vetted by other people yet, right?  Make sure their stay in EXCELLENT, or a bad review can do a lot of harm this early.

2) Pictures. Your Airbnb doesn't have any pictures that "pop." Honestly, the last picture with the backyard should be your cover photo for now, as it's framed well and shows the large backyard for children to play. Hire someone to take new photos of your place. Show why it's unique over your competition.

3) Design. There's no cohesiveness to your Airbnb. Furniture is outdated, appliances look average, fixtures are old, people want to stay in a nice place. You can definitely spruce the place up by buying ikea furniture and making your Airbnb more modern. Bonus: If you can't update your house due to a tight wallet, your Airbnb needs to scream VALUE.

[Napoleon DeCiutiis]

@Joshua Larson

Hit me up- I'm here in PCB and you should be killing it with that place- let's take a look at what you have.

Is your property ON the beach side (Panama City Beach), or are you in Panama City? (Not as rentable as the beach...)

Your main picture should be something that draws people to "Oh- I'm at the BEACH", and that should also include your title.  You need some bait, or the fish swim right by. 
Being a new rental- you need to take that punch and lower your prices until you get more positive reviews- AirBnB's algorithm pushes you up to the top of searches as you get more of them. 
Hire someone to come through and set up your shots.  It will be worth the couple of hundred of dollars to draw more people in. 

Let's chat. 

[Ryan M.]

Based on the location you aren't going to get any short-term renters. Was that sold to you as a short-term rental/vacation rental? Nobody is coming to the beach for vacation andrenting a house in a residential neighborhood miles from the beach all the way in Panama City. Sell it or rent long term.

[Sarita Scherpereel]

Hi @Joshua Larson I would look at what your competitors are doing in the area with AirDNA. See what their vacancy average is. Usually this is either a pricing issue or a location issue. Pricing you can fix and location you can fix with adjusting the price to make it worth it. 

[Villy Ellinger]

@Joshua Larson I'm not sure what you should do. That is only for you to decide based on your finances and your financial goals. But.... here are some of my observations:

1) The location of your property is really not optimal. Very far from the beach and the main tourist attractions. PCB has plenty of beachfront condos and single family STRs that are very close to the beach. 

2) Airbnb is a great advertising site, but if you are not listed on VRBO, list there as well. Also, your particular property may benefit from being listed on a direct website of a rental management company and being marketed directly to their prior guest base. A person randomly searching for a property in PCB will not think to look that far out from the beach unless there is a specific attraction associated with the property or a specific reason to look at that particular property.

3) Considering the location of your property your pricing seems high, especially for the current slowing down in the STR market (post the Pandemic peak). I only spot-checked a few dates in February. The price per night comes up at $350. When you add the taxes, the cleaning fees and the Airbnb fees on top of that, the property becomes very expensive. It says it sleeps 12, but that is how many can sleep in a number of other properties much closer to the beach, including some 3 bedroom condos on the beach with bunks beds, etc. If you look at other properties and their pricing, you will see that $350 in Feb is high regardless of the property location. I can't see your pricing for later in the year because the later months are not open for rent.

4) The property is nice and the space is great. The Florida room is definitely a great bonus. That said, it is pretty dated, especially the bathrooms. You will be competing with much nicer properties, so pricing needs to reflect that. 

5) I glanced through the rules on your Airbnb listing. I'm not sure if you've read those yourself. I'm guessing they are based on your manager's requirements. Allowing pets is an excellent idea for the property. However, some of the other rules, like don't spray sunblock inside the house, don't sit on the furniture with sunblock on, extensive quiet hours, etc.... make your rental unappealing. It is unreasonable to expect that a family with children would rent a place not only far from the beach but also where they have to worry if their kids sit on the furniture with sunblock on :-). Yes, sunblock ruins the furniture. It's cost of doing business. There are very nice washable couch covers that can be put on the furniture cushions. Amazon has some that don't really look like couch covers at all.

Overall, tough call here. It's not really a great time to sell either. So... if you can find a niche to market to that would be your best bet. Find out if there is a specific attraction near your property. Honestly, I've never sold that far away from the beach in PCB to be very helpful in that respect, but look for gold courses, nature activities, other things. If there is a gold course, may be offer some sort of discounted package for that. Or if fishing/boating is an option nearby.

Good luck!

[Eliott Elias]

Sounds like demand is low, how do other airbnb's look in the area?

[Chris Seveney]

@Joshua Larson

Did you buy it as a STR and what were the prior numbers or was it OO and you wanted to turn it into a rental?

Do the numbers work as a LTR, if not sell. It’s all about could your money be put to better use

[Drew Sygit]

Why did you keep the PMC without interviewing them?

Do they have numbers while it was under previous ownership? WHy did previous owner sell?

[January Johnson]

Quote from @Ryan M.:

Based on the location you aren't going to get any short-term renters. Was that sold to you as a short-term rental/vacation rental? Nobody is coming to the beach for vacation andrenting a house in a residential neighborhood miles from the beach all the way in Panama City. Sell it or rent long term.

This is SOOOOOO not true.  I am the longest-running self-managing (or any!) Airbnb host in the City of Panama City (NOT PCB), and my places rent very well for a variety of reasons, not just the beach, though that is still the #1 attraction.  I haven't looked at OP's location or listing, but I can tell you I have very good occupancy and not just during the high season.